Cotton: Outlook 2015-20

DG’s Consultative

Framework

Mechanism on

Cotton

Geneva

28 November 2014

José Sette

Executive Director

ICAC

World Production & Mill Use

million tons

Accumulated surplus through

2014/15: 13.3 million tons

SUMMARY 1. Supply

a. Production

b. Stocks

c. Government assistance

2. Trade

3. Mill Use

4. Prices

World Cotton Area and Prices

million hectares US cents / lb

Top Northern Hemisphere

Producing Countries

million tons

Cotton Production in Southern

Hemisphere million tons

million tons

Francophone Africa

Eastern & Southern

Africa

North Africa

Cotton Production in Africa

kg/ha Average Lint Yields

World Ending Stocks million tons

Estimated Size of China National

Reserve million tons

World Ending Stocks million tons Stocks-to-Use

Ratio

World Ending Stocks

Minus China National Reserve

million tons Stocks-to-Use Ratio

No estimate available

Direct Assistance to

Cotton and Prices

US$ billion A Index (US$/lb)

Cotton Imports million tons

3.1 2

Cotton Exports million tons

World Cotton Mill Use

million tons

Cotton Mill Use million tons

World Consumption

of Textile Fibers

Cotton and Polyester Prices

*Weekly quotes (Source: Cotton Outlook Ltd.)

US cents/lb

Developed and Developing

Countries Share of World Apparel Fiber Consumption (2010)

Developed Countries Developing Countries

Market Share of Cotton Market Share of Cotton

Season-Average A Index (source: Cotlook Ltd.)

US cents / lb

World Cotton Consumption and

Market Share of Cotton

Conclusions

1) SUPPLY 1: Production capable of meeting

expected demand

2) SUPPLY 2: Stocks likely to fall only

modestly and will continue to overhang

market

3) TRADE: reduced demand from China

means exports fall to range between 7

and 8 mtons

Conclusions 4) CONSUMPTION: recovery as cotton

prices become more competitive with

man-made fibers

5) CONSUMPTION: even with more

competitive prices, cotton’s share of

market will continue to erode

6) PRICES: Returning to long-term average

of 70 cts/lb with limited upside potential

7) PRICES: Downside potential reduced

because of gov’t assistance, but

adjustment postponed

73rd Plenary – Final Statement

ICAC members reiterated that cotton is an

integral part of the Doha Development Agenda

and that there can be no successful conclusion

of that agenda without an agreement on cotton.

The ICAC restated the importance of trade

policy as a key factor in promoting world

economic growth and development, and voiced

support for the WTO’s role in promoting free

trade.”

Thank you

sette@icac.org www.icac.org